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Shares dive 13% after reorganizing statement
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Follows path taken by Comcast's brand-new spin-off company
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Challenges seen in offering debt-laden direct TV networks

(New throughout, includes details, background, remarks from industry experts and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its declining cable organizations such as CNN from streaming and studio operations such as Max, laying the groundwork for a possible sale or spinoff of its TV business as more cable subscribers cut the cord.

Shares of Warner leapt after the company said the brand-new structure would be more deal friendly and it expected to complete the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are considering alternatives for fading cable television companies, a long time money cow where revenues are eroding as countless customers welcome streaming video.

Comcast last month unveiled plans to split the majority of its NBCUniversal cable networks into a new public company. The new business would be well capitalized and placed to obtain other cable networks if the industry consolidates, one source told Reuters.

Bank of America research analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable television service assets are a "very sensible partner" for Comcast's new spin-off company.

"We strongly think there is capacity for fairly sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the industry term for standard tv.

"Further, we think WBD's standalone streaming and studio assets would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television organization including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department in addition to movie studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as investments in streaming services such as Warner Bros Discovery's Max are finally paying off.
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"Streaming won as a habits," said Jonathan Miller, primary executive of digital media investment firm Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise stated Discovery's new business structure will separate growing studio and streaming properties from successful however diminishing cable service, giving a clearer investment photo and most likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and consultant predicted Paramount and others might take a similar path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before obtaining the even larger target, AT&T's WarnerMedia, is positioning the company for its next chess move, composed MoffettNathanson expert Robert Fishman.
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"The concern is not whether more pieces will be moved around or knocked off the board, or if additional consolidation will take place-- it is a matter of who is the buyer and who is the seller," composed Fishman.

Zaslav signified that scenario throughout Warner Bros Discovery's investor call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry consolidation.

Zaslav had actually engaged in merger talks with Paramount late in 2015, though a deal never materialized, according to a regulative filing last month.

Others injected a note of caution, keeping in mind Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it much easier for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable TV service. "However, discovering a buyer will be difficult. The networks are in debt and have no signs of development."

In August, Warner Bros Discovery made a note of the worth of its TV possessions by over $9 billion due to unpredictability around costs from cable television and satellite distributors and sports betting rights renewals.

Today, the media business announced a multi-year deal increasing the general fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with an offer reached this year with cable and broadband service provider Charter, will be a design template for future settlements with distributors. That could help stabilize pricing for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar, Arun Koyyur, Keith Weir and David Gregorio)
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